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You Just Bought a Fifteen-Year Maturity Xerox Corporate Bond Rated

Question 34

Multiple Choice

You just bought a fifteen-year maturity Xerox corporate bond rated AA with a 0% coupon. You expect to sell the bond in eight years. Find the expected interest rate at the time of sale (watch out for rounding error) .


A) 11.00%
B) 8.85%
C) 12.49%
D) 12.80%
E) 13.92% ((1.107515/1.09258) ) (1/7) -1

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